Food Prices Become A Source Of World Inflation, Sri Mulyani: To Indonesia, Please Harvest Rice Smoothly

Illustration (Photo: Doc. Antara)

JAKARTA - The government through the Minister of Finance (Menkeu) revealed that the increase in the level of inflation was strongly influenced by the movement of higher food prices. According to her, this condition does not only occur in Indonesia but is also a global phenomenon that has hit almost all countries.

“Food prices are a source of world inflation, coupled with the war in Ukraine which has an impact on disrupted supply chains. This occurs in food as well as fertilizers. The government pays special attention to this", she said at the G20 forum entitled Securitization Summit 2022 on Wednesday, July 6.

The Minister of Finance added that the impact was milder for Indonesia because the harvesting of key food commodities such as rice occurs regularly thanks to the favorable weather cycle. Different situations are experienced by various countries which are affected by quite large inflation due to soaring food prices.

"Indonesia, Alhamdulillah, in terms of food, in the last three years, our rice production and commodity products have the ability to meet domestic needs and even exports abroad", she said.

However, the state treasurer admitted that he did not want to be lulled by favorable conditions and kept a high focus on keeping inflation under control, mainly stemming from the turmoil in food prices.

"However, this does not make us complacent because we must remain vigilant about the challenges and inflationary pressures from food", said the Minister of Finance.

As previously reported by VOI, the inflation rate at the end of June 2022 has reached 4.35 percent. This figure has exceeded the target set by the government together with Bank Indonesia (BI) of 3 percent plus-minus 1 percent.